1992 (1) TMI 322 - HC - VAT and Sales Tax

Summary

Issues: Taxability of destroyed cotton turnover under Andhra Pradesh General Sales Tax Act, 1957.

Analysis:
The case involved a dispute regarding the taxability of the turnover relating to cotton purchased by the petitioner but destroyed in a fire accident during the assessment year 1984-85. The relevant provision under consideration was section 6 of the Andhra Pradesh General Sales Tax Act, 1957, read with item No. 8 of Schedule III of the Act. The point of levy for taxable cotton purchases was determined as the last purchase within the State. The Sales Tax Appellate Tribunal upheld the assessment made by the authorities, holding that the petitioner, being the last dealer who purchased the cotton within the State, was liable to pay sales tax on the destroyed cotton turnover.

The petitioner argued that the intention to sell the cotton remained unchanged despite the fire accident, and therefore, the turnover should not be taxed. The petitioner relied on a Gujarat High Court decision and a Bombay High Court decision to support the contention that destruction by fire did not alter the intention to resell the goods. However, the Court emphasized that under the relevant provisions of the Act, the intention of the dealer was not a determining factor for taxability. The crucial aspect was the occurrence of the last purchase within the State, which, in this case, was undisputedly by the petitioner before the cotton was destroyed.

The Court distinguished the Gujarat High Court's interpretation, emphasizing that the language of the Act did not focus on the dealer's intentions but on the occurrence of the last purchase within the State. The Court clarified that the circumstances leading to the inability to resell the goods, such as destruction by fire, did not affect the tax liability under section 6 of the Act. Consequently, the Court found no legal error in the Tribunal's decision regarding the taxability of the destroyed cotton turnover and dismissed the tax revision case.

In conclusion, the Court held that the turnover of the destroyed cotton purchased by the petitioner was exigible to tax under section 6 of the Andhra Pradesh General Sales Tax Act, as the petitioner was the last purchaser within the State, irrespective of the subsequent events leading to the destruction of the goods. The decision reaffirmed the statutory provisions' focus on the occurrence of the last purchase rather than the dealer's intentions or subsequent circumstances, leading to the dismissal of the petition.